Bloomberg: FTX and Alameda Research may have a conflict of interest

The Bloomberg publication stated that 22% of the volume of all transactions on the FTX crypto exchange passes through the market maker Alameda Research, whose founder is Sam Bankman-Fried.

Bloomberg is urging regulators to be aware that if legislation to oversee such schemes is not developed soon, there could be a conflict of interest between the FTX trading platform and Alameda Research. The article notes that the company, unknown to anyone in the cryptocurrency market, earned more than $1 billion in 2021. This immediately raised it to the level of the largest banks and investment companies in the United States.

Citing data from CB Insights, Bloomberg analysts report that Alameda Research has participated in 117 funding rounds since 2020. However, Sam Bankman-Fried, who owns 50% of FTX shares and 100% of Alameda Research securities, argues that there will be no conflict of interest between the exchange and the market maker.

He explained that Alameda Research submits orders and accesses user information on a par with other clients. In addition, according to Bankman-Fried, the company is not currently the largest market maker on FTX. However, the closed nature of the exchange’s trading information makes it impossible to either confirm or refute Bloomberg’s claims.

Analysts at Bloomberg, dissatisfied with the response of the head of FTX, said that in the stock markets, these two areas of entrepreneurial activity are traditionally not connected. According to them, in the Bankman-Fried financial scheme there is no place for competition between interested parties, which means that there is no opportunity to reduce the price for users.

Note that Bloomberg’s criticism goes not only to large crypto companies. Last month, the publication criticized the US Securities and Exchange Commission (SEC) for its attitude towards bitcoin ETFs.